Bank of England Holds Interest Rates at 5% in 8-1 Vote, Extends Bond Reduction Plan

Sep 19, 2024, 11:04 AM

The Bank of England has decided to maintain its key interest rate at 5% during its latest meeting in September 2024. This decision was made with an 8-1 vote, with one member voting for a rate cut. The Bank also announced plans to reduce its stock of British government bonds by £100 billion over the next 12 months. Governor Andrew Bailey indicated that any future rate cuts would be implemented gradually to avoid market disruptions. The decision to hold rates comes after a previous rate cut in August and amidst steady inflation in the UK. Most MPC members believe a gradual approach to cutting rates is warranted, and the Bank noted that quantitative tightening (QT) has proceeded smoothly, with no evidence of damage to market functioning.